Europe to experience economic contraction in 2012 and 2013

A new report issued by the European Central Bank forecasts a downward trend in growth and similar inflation.

By LUIS MIRANDA | THE REAL AGENDA | AUGUST 9, 2012

The “let’s do the same thing and expect better results” crowd is getting what they wanted in the Euro zone. The latest analysis issued by consultants hired by the ECB explains that the European economy is bound to contract n 2012 and continue on that trend in 2013. No surprises here, unless you are one who believes in banker controlled economies as supposed to market driven ones.

The results of the corporate elite’s policies that were supposed to help bankrupt nations to stay afloat, while they think of new non-solutions, crashed to the ground in Greece but that did not stop the bankers from applying the same so-called solutions in Spain, which is a more significant member of the European economy. So the story repeated itself there as well.

The experts consulted by the ECB have revised their forecasts for growth in the euro area this year and forecast a contraction of 0.3% versus the 0.2% forecast in May, which speaks against all measures adopted so far by Brussels and its accomplices in the banking power structure. The non-solution at hand that is being proposed is to once again cut in interest rates.

In the survey, the European Central Bank (ECB) held between 16 and 19 July and published today in the August monthly bulletin, experts conclude that growth will continue its downward trend for this year and next. With this review, the regulator says that the euro zone has room to lower interest rates in September.

“The results also imply that inflation expectations for 2012 and 2013 have experienced virtually no change compared with the previous survey,” the ECB said.

As for the inflation forecast in the longer term, the average remains unchanged at 2%. That is under current conditions, which are not likely to stand, as the euro region digs itself into a deeper hole by continuing their policies of further indebtedness, which will only prolong and worsen the crisis. Consequently, inflation will certainly not stay at 2%.

The ECB president Mario Draghi said last week that “the governing board of the entity discussed a possible lowering of interest rates, but decided that it is not the right time.” Some experts expect the ECB to reduce the price of money, currently at 0.75% at its September meeting. As in other occasions, the European Central Bank will wait until the last minute to act, and its actions will not be the real solutions needed to bring the euro economy back. As we have now heard the main stream media confess it, that is the goal of the banking elites: to delay the collapse as much as possible while inflicting pain to the nations that are in financial trouble, because this will assure the maximum consolidation of power and resources.

Expectations of growth of gross domestic product (GDP) by 2012 have been revised slightly downwards by 0.1 percentage points and currently stand at -0.3%. For 2013, forecasts of growth in the euro area have declined significantly, by 0.4 percentage points to 0.6%. Under current conditions, once can expect, that even with cooked numbers, Europe will have no growth at all after 2013, especially if more nations such as Italy and France need to be rescued as well.

“The main determinants of the downward revisions are stepping up fiscal consolidation measures in some countries in the euro area and the greater uncertainty surrounding the resolution of sovereign debt crises,” the report said. Also, “maintaining the downside risks to growth in GDP in the euro area, resulting primarily from an escalation of the sovereign debt crisis.” And what is the ECB or the IMF doing to solve the sovereign debt crisis? Nothing. That is the big pink elephant in the room, but the bankers are simply staring at it without proposing a single solution. This inaction stems from the same reason explained above. A slow, prolonged collapse will assure better results for the bankers.

“These risks are also mentioned a further deterioration in confidence, increased levels of uncertainty and a fall in external demand as a result of a slowing global economy,” according to the ECB. The inflation forecasts for 2012 and 2013 obtained from the survey are located at 2.3% and 1.7% respectively, implying that not been revised figures for 2012 and have been revised 0.1 percentage point decline in the 2013.

This downward revision for 2013 was primarily “to lower prices for energy and raw materials, the less favorable growth prospects and the fact that wage pressures have been more limited,” according to the ECB. He added that inflation expectations for 2014 are at 1.9%. Risks to the outlook for price developments remain generally balanced over the medium term.

Upside risks come from further increases in indirect taxes, resulting from the need for fiscal consolidation, and some increases in energy prices over the medium term plan. The main downside risks are related to the impact of lower growth than expected in the euro area, especially due to the escalation of tensions in financial markets that could affect the balance of risks to the downside.

U.K. in First Double-Dip Recession since 1970s

The first double-dip recession since the 1970s forced Prime Minister David Cameron to defend his spending cuts in Parliament.

By JENNIFER RYAN | BLOOMBERG | APRIL 2012

Gross domestic product fell 0.2 percent from the fourth quarter of 2011, when it declined 0.3 percent, the Office for National Statistics said today in London. The median of 40 estimates in a Bloomberg News survey was for an increase of 0.1 percent. A technical recession is defined as two straight quarters of contraction.

As an anti-austerity backlash gains ground in Europe, Cameron described the data as “disappointing” and pledged to support growth without backtracking on the U.K.’s biggest fiscal squeeze since World War II. The Bank of England is in the final month of its latest round of economic stimulus and the drop in output comes as prospects dim in the euro region, Britain’s biggest export market.

“This isn’t supportive of the fiscal consolidation program, so the government is likely to be concerned about that,” said Philip Rush, an economist at Nomura International in London. “The data were bad, and that supports the view that the Bank of England will do a final 25 billion pounds of quantitative easing in May.”

Bank of England policy maker David Miles had signaled yesterday that today’s result was possible, saying in an interview with Bloomberg News that a negative number “wouldn’t be a great surprise.”

U.K. 10-year gilts advanced immediately after the data were published before easing again. The yield rose 3 basis points to 2.123 percent as of 1:12 p.m. in London. The pound fell as much as 0.4 percent, then pared its decline to $1.6116.

Construction Slump

From a year earlier, the economy was unchanged in the first quarter. The median estimate in a Bloomberg survey of 31 economists was for 0.3 percent growth from a year earlier.

The quarterly drop in GDP was due to a 3 percent slump in construction, the most since the first quarter of 2009, and a 0.4 decline in industrial production. Manufacturing contracted 0.1 percent and services, the largest part of the economy, expanded by 0.1 percent, boosted by transport, storage and communication.

The data contrasts with a report today showing confidence among manufacturers rose to the highest level in two years this month. The Confederation of British Industry’s quarterly gauge of factory optimism surged to 22 from minus 25 in January.

Separate surveys this month showed that growth in services, manufacturing and construction accelerated in March. The British Chambers of Commerce said the GDP data is likely to be revised higher by the statistics office.

‘Underlying Trend’

Surveys “have shown a more positive picture, and we believe these give a more accurate indication of the underlying trends,” Chief Economist David Kern said in a statement today. “We think it is likely that the preliminary estimate will be revised upwards when more information is available.”

The FTSE 100 index rose 0.1 percent today. Still, its 2.6 percent advance this year trails the 4.9 percent increase by Europe’s Stoxx 600 Index.

Rising energy prices, government spending cuts and anemic wage growth are squeezing U.K. consumers, creating a drag on the recovery. Pay growth slowed to 1.1 percent in the three months through February, less than a third of the inflation rate. An extra public holiday in June to mark Queen Elizabeth II’s 60 years on the throne may also depress economic output in the second quarter.

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Analysis of Financial Terrorism in America

Over 1 Million Deaths Annually, 62 Million People With Zero Net Worth, As the Economic Elite Make Off With $46 Trillion

David DeGraw
Global Research
August 11, 2011

Abstract: Welcome to World War III

Despite increasing personal financial hardship, most Americans remain unaware of the economic world war currently unfolding. An all-pervasive corporate and government propaganda campaign has effectively obscured this blatant reality. After extensive analysis, it is evident that World War III is a war between the richest one-tenth of one percent of the global population and 99.9 percent of humanity. Or, as I have called it, The Economic Elite Vs. The People [18]. This war has been a one-sided attack thus far. However, as we have seen throughout the world in recent months, the people are beginning to fight back. The following report is a statistical analysis of the systemic economic attacks against the American people.

Introduction

The American public has sustained intensive economic attacks across broad segments of the population. While the attacks have been increasingly severe in scale over the past four years, they have been implemented with technocratic precision. They have been incrementally applied thus far, successfully keeping the population passive and avoiding any large-scale civilian unrest, while effectively reducing living standards for the majority of the population. As you will see in this report, the 55 million Americans that have been hit the hardest have thus far acquiesced due to temporary financial assistance, such as food stamps and extended unemployment benefits.

The global Economic Elite have been much more strategic in handling the American public, as they are potentially the greatest threat to their continued consolidation of wealth, resources and power. National populations that are not as powerful, and on the periphery of the Economic Elite’s global empire, have been dealt with in much harsher fashion. In many smaller and less powerful countries the dramatic rise in food prices and costs of living have led to all-out revolt — Tunisia, Algeria, Albania and Egypt were among the first to rebel. While the contagion of rebellion has rapidly spread throughout Northern Africa and the Middle East, it is also spreading in a decentralized manner throughout most of the world, now threatening popular rebellion throughout Europe. Like the US population, the geographically clustered European nations represent a potentially powerful countervailing force to the Economic Elite’s continued domination.

Within the United States, the technocratic suppression of the population has been extensive. Increasingly severe economic and governmental policies have systematically eroded civilian wealth, power and rights. Intensive propaganda has effectively distracted, confused, isolated, marginalized and divided the US population. Despite the success of these efforts thus far, given the severe, prolonged, unsustainable and escalating level of economic suffering, outbreaks of civil unrest are inevitable. The US population, if a critical mass is reached, represents the greatest threat to the Economic Elite. In this regard, the American people are their primary adversary.

In writing this report, I will clearly demonstrate the severity and scale of the deliberate systemic economic attacks against the US population, in hope that we can urgently build a critical mass of aware and engaged citizens.

Part One :: The Economic Devastation

Snapshot: According to most recent Census Bureau data, from 2005 – 2009, average US household wealth declined by 28% [19]. This represents a loss of $27,000 per household. Currently, at least 62 million Americans, 20% [19] of US households, have zero or negative net worth.

The Census figures cited above are based on statistics that have been consistently proven to be lowball estimates. The government and corporate media spread propaganda on vital economic statistics that mask the severity of our economic crisis. Deceptive inflation, unemployment, poverty and GDP measures, which cast the illusion of recovery, are easily exposed with some research and a closer look at the data. Throughout this report, we will explore significant examples of government economic propaganda. In several cases, the government has been forced to revise their numbers due to proven inaccuracies. The government’s “revisions” are most always for the worse, and are usually just a footnote correction that the public is rarely ever aware of. All that being said, for many statistics we are forced to use government data, as there are not any other extensive data sets available from alternative sources.

I :: Record Breaking Poverty

The Census Bureau poverty rate is a horribly flawed measurement that uses outdated methodology. The Census measures poverty based on costs of living metrics established in 1955 – 56 years ago. They ignore many key factors, such as the increased costs of medical care, child care, education, transportation, and many other basic costs. They also don’t factor geographically-based costs of living. The National Academy of Science measure, which gets little if any corporate media coverage, gives a much more accurate account of poverty, as they factor in these vital cost of living variables.

The most current Census data revealed that 43.6 million Americans, 14.3% of the population, lived in poverty in 2009. While that is a staggering number that represents the highest number of American people to ever live in poverty, and a dramatic increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the number of Americans living in poverty in 2009 was at least 52 million [20]. Recently, the National Academy of Science released their latest findings, backing up my claim by revealing that 52,765,000 [21] Americans, 17.3% of the population, lived in poverty in 2009.

The poverty rate for children is even worse. According to Census data, a total of 15.5 million [22] American children lived in poverty in 2009, which is 20% of all children. The number of children in poverty increased 28% since 2000, and jumped 10% from 2008 to 2009. Extrapolating data from the 2009 National Academy of Science poverty rate, in relation to the Census childhood poverty data, the number of American children living in poverty in 2009 is more accurately 18.8 million, which is 24%, or nearly one in four.

Other than this rapidly increasing number children who are in families that have recently fallen into poverty, “every day in America 2,573 babies [22] are born into poverty.”

As the chart to the right shows, even with the lower Census numbers, nine major American cities have a poverty rate over 25%.

It is important to note, based on many key indicators, as you will see throughout this report, the overall poverty totals have increased since 2009. Also consider that the recent deficit reduction plan is going to cut “anti-poverty” programs that currently assist tens of millions of Americans. A study by the National Bureau of Economic Research estimates that “the poverty rate would double [23] without these programs.” It is predicted that the new deficit deal will cut the funding for these programs in half [24], which, based on these estimates, would bring the total number of Americans living in poverty up to 80 million people, 26% of the population.

II :: Record Breaking Food Insecurity

For another revealing statistic, which has been quickly increasing, we can look at the number of Americans currently surviving off of food stamps. In 2005, 25.7 million [25] Americans needed food stamps, currently 45.8 million people [26] rely on them. As the chart to the right shows, the number of people in need of food stamps has been rapidly increasing year-over-year.

Meanwhile, Congress is cutting the funding [27] for the food stamp program at a time when the Department of Agriculture estimates that an additional 22.5 million [28] people will need them, bringing the total number of Americans in need of food assistance to a stunning 68.3 million people.

III :: Record Breaking Unemployment

While the “official” unemployment rate hovers around 9%, 14 million people, the government’s numbers are deceptively low once again. The only reason unemployment has stayed below 10% for the past few months is because millions of long-term unemployed, and part-time workers who are looking for full-time work, are not included in the baseline government unemployment rate. John Williams, from ShadowStats.com [29], has a consistently proven method of tracking unemployment that provides a much more accurate view of the overall situation. As shocking as it may sound, when you apply his SGS method, counting the total number people in need of employment, you get a current unemployment rate of 22.5%, which is an all-time record total of 34 million people currently in need of work. Here is how the SGS rate is calculated:

“The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.”

On top of these shocking figures, the labor force participation rate, which measures the percentage of the total population currently working, has fallen to a 27-year low of 63.9%.

Currently, an all-time record 6.3 million [30] people have been unemployed for over six months. As the chart to the right shows, the average time it takes for a person to find a job has also just hit an all-time high of 40.4 weeks [31].

As companies continue to downsize and shift jobs overseas, unemployment is once again accelerating. Private-sector job cuts in July surged 60% to a 16-month high [32]. When accounting for population growth within the total labor force, from December 2007 to present, we have lost 10.6 million [33] jobs.

With the implementation of state and federal budget cuts, public-sector unemployment is accelerating as well. According to the Center on Budget and Policy Priorities, since August 2008, state and local governments have cut 577,000 [34] jobs. The Economic Policy Institute estimates that cuts in the new deficit deal will lead to an additional 1.8 million [24] job losses.

Of the new jobs that have been added in 2010, 60% [35] of them are in low-wage fields. Since December 2007, the official unemployment rate has masked the fact that 2.8 million [35] of the news jobs created have been part-time jobs.

Breaking down the data, over the last 12 months [36], the National Employment Law Project found that well-paying jobs are rapidly decreasing, while low-paying jobs are helping to mask an increasingly dire employment crisis:

· Lower-wage industries constituted 23% of job loss, but fully 49% of recent growth

· Mid-wage industries constituted 36% of job loss, and 37% of recent growth

· Higher-wage industries constituted 40% of job loss, but only 14% of recent growth

IV :: Declining Income

While the cost of living from 1990 – 2010 increased by 67%, worker income has declined. According to the most recent available IRS data, covering the year of 2009, average income fell 6.1%, a loss of $3,516 per worker, that year alone. Average income has declined 13.7% from 2007 – 2009, representing a $8,588 [37] loss per worker.

The decline in worker income is due to the dramatic increase in CEO pay. CEO pay has consistently increased year-over-year since the mid-1970s. From 1975 – 2010, worker productivity increased 80%. Over this time frame, CEO pay and the income of the economic top 0.1% (one-tenth of one percent) of the population quadrupled [38]. The income of the top 0.01% (one-hundredth of one percent) quintupled [38].

To understand the affect CEO pay increases have had on workers’ declining share of income on an annual basis, after analyzing 2008 tax data, leading tax reporter David Cay Johnston summed up [39] the situation with these revealing statistics:

“Had income growth from 1950 to 1980 continued at the same rate for the next 28 years, the average income of the bottom 90 percent in 2008 would have been 68 percent higher…. That would have meant an average income for the vast majority of $52,051, or $21,110 more than actual 2008 incomes. How different America would be today if the typical family had $406 more each week…”

As shocking as that is, over the last two years, workers have lost an even higher share of income to CEOs. In the last year alone, CEO pay skyrocketed by 28% [40]. Looking at 2009, according to a recent Dollars & Sense report [41], workers lost nearly $2 trillion in wages that year alone:

“In 2009, stock owners, bankers, brokers, hedge-fund wizards, highly paid corporate executives, corporations, and mid-ranking managers pocketed—as either income, benefits, or perks such as corporate jets—an estimated $1.91 trillion that 40 years ago would have collectively gone to non-supervisory and production workers in the form of higher wages and benefits.”

As bad as these numbers are, consider that the attack on American workers has increased significantly since 2009. From 2009 to the fourth-quarter of 2010, 88% of income growth [42] went to corporate profits (i.e. CEOs), while just 1% went to workers.

As the NY Times reported in an article entitled, “Our Banana Republic,” from 1980 – 2005, “more than four-fifths of the total increase in American incomes went to the richest 1 percent.” Again, as bad as that was, since 2005 it has gotten even worse, as Zero Hedge recently reported [43], labor’s current “share of national income has fallen to its lowest level in modern history.” This chart shows how workers’ percentage of income has been rapidly declining:

The bottom line, as statistics clearly demonstrate, these trends are getting worse and the attacks against us, as severe as they have been over the past four years, are dramatically escalating.

Part Two :: The Economic Elite
“There’s class warfare, all right, but it’s my class,

the rich class, that’s making war, and we’re winning.”

– Warren Buffett, Chairman and CEO of Berkshire Hathaway

V :: How Much Wealth Do The Economic Elite Have?

While 68.3 million Americans struggle to get enough food to eat and wages are declining for 90% of the population, US millionaire household wealth has reached an unprecedented level. According to an extensive study by auditing and financial advisory firm Deloitte, US millionaire households now have $38.6 trillion [44] in wealth. On top of the $38.6 trillion that this study reveals, they have an estimated $6.3 trillion [45] hidden in offshore accounts.

In total, US millionaire households have at least $45.9 trillion in wealth, the majority of this wealth is held within the upper one-tenth of one percent of the population.

If all this isn’t obscene enough, to further demonstrate how the global economy has now been completely rigged, Deloitte’s analysis predicated, based on current trends, that US millionaire households will see a 225% increase in wealth to $87.1 trillion by 2020. Accounting for wealth hidden in offshore accounts, they are projected to have over $100 trillion in total within the next decade.

Most people cannot even comprehend how much $1 trillion is, let alone $46 trillion. One trillion is equal to 1000 billion, or $1,000,000,000,000 [46]. To put it in perspective, last year the entire cost of feeding all 40 million Americans on food stamps was $65 billion [28].

Now consider, according to the latest IRS data, only 0.076% of the population, less than one-tenth of one percent, earned over $1 million [37] in 2009.

The graph below, based on data from the Tax Policy Center, shows how much income is earned by a household at any given percentile in income distribution:

The highest bracket for annual income is $50 million or more. Only 74 Americans are in this elite group. The average income within this category was $91.2 million [39] in 2008. As astonishing as that is, in 2009 they averaged $518.8 million [39] each, or about $10 million per week. This means, in the depths of the recession, the richest 74 Americans increased their income by more than 5 times within this one year. These 74 people made more money than 19 million [39] workers combined.

In context, overall, the richest 400 people [47] in the US have as much wealth as 154 million Americans combined, that’s 50% of the entire country. The top economic 1% of the US population now has a record 40% of all wealth [48], and have more wealth than 90% [49] of the population combined.

VI :: Who Rules America? Revealing The Economic Top 0.1%

Here is an analysis [50] from an investment manager with mega-wealthy clients breaking down the economic top 0.5% of the population, recently published by William Domhoff, sociology professor and author of Who Rules America? [51]:

“Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the US. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits.

Folks in the top 0.1% come from many backgrounds but it’s infrequent to meet one whose wealth wasn’t acquired through direct or indirect participation in the financial and banking industries…. Most of the serious economic damage the US is struggling with today was done by the top 0.1% and they benefited greatly from it…. For example, in Q1 of 2011, America’s top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries…. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%.…

In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced….

I could go on and on, but the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the US financial system. It allows them to protect and increase their wealth and significantly affect the US political and legislative processes.

They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%….

… the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it.”

To get into the top economic 0.01% (one-hundredth of one percent) of the population, you have to have a household income of over $27 million [52] per year.

If you look at some of the central players who caused this economic crisis, you will see that they are among this Economic Elite group.

Former Goldman Sachs CEO and Bush Treasury Secretary Hank Paulson had already amassed at least $700 million prior to moving to the US Treasury in 2006. Current Goldman Sachs CEO Lloyd Blankfein and a few other top executives at Goldman Sachs just received $111.3 million in bonuses. Blankfein just took home $24.3 million, as part of a $67.9 million bonus he was awarded. Goldman’s President Gary Cohn took home $24 million, as part of a $66.9 million bonus he was awarded. Goldman’s CFO David Viniar and former co-president Jon Winkelried both took home over $20 million in bonuses.

Citigroup CEO Vikram Pandit just took home $80 million, in what may eventually total more than $200 million in compensation and bonuses. Coming in at the top of the list is JP Morgan Chase CEO Jamie Dimon, who just took home $90 million.

If you think people in this income level don’t control the US political process, you are not paying attention. After they caused this economic crisis, they got the government to give them trillions of dollars in taxpayer support, and then, after taking our tax dollars, they gave themselves all-time record-breaking bonuses. 2009 was an all-time record-breaking year for Wall Street executives bringing in a total of $145 billion [53]. And then, in 2010, they raised the bar even higher, breaking the all-time record set the year before by pulling in another $149 billion [54]. The audacity of it all is stunning.

Finding people more grotesquely greedy than Wall Street executives would seem to be impossible. However, health insurance CEOs are giving them a run for their money. As the LA Times reported [55]:

“Leaders of Cigna, Humana, UnitedHealth, WellPoint and Aetna received nearly $200 million in compensation in 2009, according to a report, while the companies sought rate increases as high as 39%….

H. Edward Hanway, former chief executive of Philadelphia-based Cigna, topped the list of high-paid executives, thanks to a retirement package worth $110.9 million. Cigna paid Hanway and his successor, David Cordani, a total of $136.3 million last year….

Ron Williams, the CEO of Hartford, Conn.-based Aetna Inc., earned nearly $18.2 million in total compensation, down from $24.4 million in 2008.”

Aetna CEO Ron Williams has recovered from his down year in 2009 by making $72 million [56] in 2010.

Given this level of obscene profiteering within the health care industry, it is not surprising that Americans pay more for medical care than any other nation in the world. In fact, Americans are forced to pay twice as much as most nations, and get lower quality care in return. As health insurance companies admitted, they have been reaping windfall profits because people with health insurance plans still cannot afford to go to the doctors and have stopped going unless it is an absolute emergency. With well over 50 million people unable to afford health insurance and the skyrocketing costs, it is not surprising that over 60% of all personal bankruptcies are the result of medical bills. In fact, 75% of the medical bankruptcies filed are from people who have health insurance.

Within this Economic Elite group, you also have the war profiteering [57] oil companies, which themselves are in large part owned by the big Wall Street banks. The biggest five oil companies, while gas prices have been skyrocketing, reaped $36 billion [58] in profit last quarter. These companies also receive an average of $6 billion [58] per year in tax subsidies.

VII :: Tax Breaks For The Rich, Budget Cuts For The Rest Of Us

To further demonstrate how the mega-wealthy have seized control our political process, consider that the richest 400 Americans paid 30% of their income in taxes in 1995, but they now pay only 18% [59].

In fact, 1,470 Americans [60] earned over $1 million in 2009 and didn’t pay any taxes.

The average tax rate for millionaires was 22.4% in 2009, down from 30.4% in 1995. The average millionaire saves $136,000 [61] a year due to reduced tax rates.

Looking at the tax rate from a long-term perspective, the amount of money the richest people and most profitable corporations pay in taxes has fallen dramatically since 1955. Corporate tax accounted for 27.3% of federal revenue in 1955. In 2010, corporate tax accounted for only 8.9% [62] of federal revenue. Corporate taxes accounted for 4.3% of overall GDP in 1955, in 2010 they accounted for only 1.3% [62].

Part Three :: The Perfect Storm Overhead:

(Inequality = Debt = Austerity = Civil Unrest = Inflation + Deflation = Stagflation)

The cuts in taxes for the mega-wealthy have led to record wealth inequality and resulted in a record national deficit. Meanwhile, to make up for the deficit that the richest one-tenth of one percent of the population has created, Democrats and Republicans are committed to making draconian budget cuts to vital social services, which target the poor, middle class, elderly and sick, while handing out billions more in corporate welfare annually. (Inequality = Debt = Austerity)

Just as the government has done, to make up for tax revenue lost to the mega-wealthy, Americans have made up for the decline in income by taking on large amounts of debt as well. (Inequality = Debt)

In a severely unequal society, massive debt will always be created, thus forming a vicious cycle of increasing inequality and increasing debt, until the fragmentation of society reaches a breaking point when those in debt cannot afford to pay back their debts without starving to death. We are now reaching that breaking point. (Inequality = Debt = Austerity = Civil Unrest)

VIII :: Debt Slavery

The Indentured Servant Has Become The Indebted Citizen

As for statistics on Americans being buried in financial debt, the indentured servant has evolved into the indebted citizen. As mentioned before, from 1990 – 2010 costs of living have increased 67%, while wages have stagnated and declined. As the national debt has reached a record $14.6 trillion, total personal debt is now over $16 trillion [63]. Consumer debt is $2.5 trillion. Credit card debt is $805 billion and student debt now exceeds $1 trillion [64].

Obviously, the more severe your debts are, the more you have to cut back in spending and the less money you have to buy new items. (Debt = Austerity)

Meanwhile, a perfect storm circles overhead as society breaks down and falls into an economic death spiral – health care, food and gas costs are skyrocketing, while income and home values are plummeting. (Inflation + Deflation = Stagflation)

Given these conditions, it is not surprising that over 250 million Americans, another record-breaking number, are currently living paycheck-to-paycheck struggling to make ends meet.

IX :: Inflation

The following charts, from Advisor Perspectives, show the increase in costs of living since 2000:

As you can see, the price of basic necessities are consistently increasing, only clothing (apparel) has declined. The second chart highlights the crucial skyrocketing cost of energy:

The third chart highlights the pernicious skyrocketing cost of education:

The cost of education essentially buries a young person in a debt that they will spend a significant portion of their life attempting to get out of. Given the increasing costs of living, and the decreasing ability to make an expected income from such an expensive level of education, this young demographic will most likely live an entire life locked into spiraling levels of debt that they will never be able to get out of.

Propaganda Inflation

When reporting on inflation, the Bureau of Labor Statistics has twice, since 1980, revised their methodology to mask the severity of inflation, similar to how they mask the severity of unemployment. In their Consumer Price Index (CPI), which measures inflation, they have heavily discounted the measurement weight of energy, food and education – three of the most significant costs for most American households.

To understand the significance in their revised methodology, current “official” CPI is at a 3.6% annual rate. However, if calculated the way it was before former Federal Reserve Chairman Alan Greenspan altered it in 1980, it would be 11.1% [65], three times worse than officially stated.

So while the government and the Federal Reserve claim that inflation is low, at 3.6% [66] over the past year, food prices have increased 39% [67] and US gas prices have increased 34% [68] over the same time frame.

The increase in gas cost over the past one-year masks the severity of total gas price inflation, which is currently 125% more [68] expensive since December 2008, increasing from $1.67 per gallon to $3.75.

The Hidden Tax

The Federal Reserve’s strategic policy known as Quantitative Easing (QE) has been a significant factor in the rising cost of basic necessities by deliberately stimulating inflation, while decreasing the value of the dollar. Looking at their recent QE2 program, the dollar lost 7.5% [69] of its value from January 2010 through March 2010. From August 2010 through March 2010, the dollar lost 17% [69] of its value. To understand how this acts as a hidden tax, consider if you had $10,000 in the bank, over this time frame you would have lost $1700 in purchasing power. So your $10,000 would now be worth $8300. At the same time, the cost of gas and food drastically increased.

The Phantom Recovery

By decreasing the value of the dollar, the Federal Reserve is also inflating the stock market by creating the impression that stock prices are rising, which, when measured in dollars, they have. However, in real terms, their overall value has decreased. To understand how deceptive this strategy has been in giving the appearance of a rising market, instead of measuring overall stock value in dollars, let’s look at their overall value when measured in terms of gold:

Dow/Gold Chart from January 1, 2003 – August 8, 2011

As investor Michael Krieger explains:

“You can see from the chart above the downtrend of stock prices in real terms is completely intact and they have now hit a new low, below the previous low point in March 2009. In fact, although stocks did temporarily rise in real terms from the low in 2009 for the year as a whole, they were still down 5% in real terms. Then last year, stocks were 14% lower in terms of gold. Finally, despite a brief rally early in 2011, stocks in terms of gold are down 23% year-to-date.”

Dollar Vs. Gold

When comparing the value of the dollar to the value of gold, the dollar has lost a stunning 84% of its value since 2000. In 2000, gold was worth $279 per ounce, as of August 8, 2011, gold is $1,725 per ounce. In fact, the dollar continues to fall in value while gold continues to rise.

Stagflation

All these factors together create a perfect storm of stagflation. As 90% of Americans experience income declines, and the value of the dollar declines, the price of necessities are rising, while the one major asset many Americans have, a house, is also declining in value. Already, thanks to declining home values, 28% of US homeowners owe more on their mortgages than their home is currently worth. With 10.4 million American families having lost their homes to foreclosure since 2007, Amherst Securities, a leading broker/dealer focused on mortgage-related investments, estimates that another 10.8 million [70] homes are at risk of default over the next six years. This will obviously continue downward pressure on home values.

X :: The Beaten Masses

Confronted With Severe Financial Hardship, Why Do Americans Remain Passive?

With an unprecedented sum of wealth, tens of trillions of dollars, held within the top one-tenth of one percent of the US population, we now have the highest and most severe inequality of wealth in US history. Not even the Robber Barons of the Gilded Age were as greedy as the modern day Economic Elite.

As famed American philosopher John Dewey once said, “There is no such thing as the liberty or effective power of an individual, group, or class, except in relation to the liberties, the effective powers, of other individuals, groups or classes.”

In The Economic Elite Vs. The People [18], I reported on the strategic withholding of wealth from 99% of the US population over the past generation. Since the mid-1970s, worker production and wealth creation has exploded. As the statistics throughout this report prove, the dramatic increase in wealth has been almost entirely absorbed by the economic top one-tenth of one percent of the population, with most of it going to the top one-hundredth of one percent.

If you are wondering why a critical mass of people desperately struggling to make ends meet are still not fighting back with overwhelming force and running the mega-wealthy aristocrats out of town, let’s consider two significant factors:

1) People are so busy trying to maintain their current standard of living that their energies are consumed by holding on to the little that they have left.

2) People have very little understanding of how much wealth has been consolidated within the top economic one-tenth of one percent.

Considering the first factor, it is obvious that people have become beaten down psychologically and financially. A report in the Guardian entitled, “Anxiety keeps the super-rich safe from middle-class rage,” suggests that people are so desperate to hold on to what they have that they are too busy looking down to look up: “As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling middle classes look down more anxiously than they look up, particularly in recession and sluggish recovery.”

Considering the second factor, people do not understand how much wealth has been withheld from them. The average person has never personally experienced or seen the excessive wealth and luxury that the mega-rich live in. Wealth inequality has grown so extreme and the wealthy have become so far removed from average society, it is as if the rich exist in some outer stratosphere beyond the comprehension of the average person. As the Guardian report mentioned above also states:

“… having little daily contact with the rich and little knowledge of how they lived, they simply didn’t think about inequality much, or regard the wealthy as direct competitors for resources. As the sociologist Garry Runciman observed: ‘Envy is a difficult emotion to sustain across a broad social distance.’… Even now most underestimate the rewards of bankers and executives. Top pay has reached such levels that, rather like interstellar distances, what the figures mean is hard to grasp.”

In fact, the average American vastly underestimates the severe wealth disparity that we currently have. This survey, featured in the NY Times, reveals that Americans think our society is far more equal than it actually is:

“In a recent survey of Americans, my colleague Dan Ariely and I found that Americans drastically underestimated the level of wealth inequality in the United States. While recent data indicates that the richest 20 percent of Americans own 84 percent of all wealth, people estimated that this group owned just 59 percent – believing that total wealth in this country is far more evenly divided among poorer Americans.

What’s more, when we asked them how they thought wealth should be distributed, they told us they wanted an even more equitable distribution, with the richest 20 percent owning just 32 percent of the wealth. This was true of Democrats and Republicans, rich and poor – all groups we surveyed approved of some inequality, but their ideal was far more equal than the current level.”

Here is a chart showing the results from their survey:

The fact of the matter is that the overwhelming majority of US population is unaware of the vast wealth at hand. An entire generation of unprecedented wealth creation has been concealed from 99% of the population for over 35 years. Having never personally experienced or known of this wealth, the average American cannot comprehend what is possible if even a fraction of it was used for the betterment of society as a whole.

In fact, given modern technology and wealth, not a single American citizen should live in poverty. The statistics clearly demonstrate that we now live in a Neo-Feudal society. In comparison to the wealthiest one-tenth of one percent of the population, who are sitting on top of tens of trillions of dollars in wealth, we are modern day serfs, essentially propagandized peasants.

The fact that the overwhelming majority of Americans are struggling to get by, while tens of trillions of dollars are consolidated within a small fraction of the population, is a crime against humanity.

The day the average American fully comprehends how much wealth is consolidated within just the top one-tenth of one percent of the population, there will be a massive uprising and all the paid off politicians will be run out of town.

The next time you are stressed out, struggling to make ends meet and pay off your debts, just think about the trillions of dollars sitting in the obscenely bloated pockets of one-tenth of one percent of the population. The first step in overcoming your peasant status is to understand that you are indeed a peasant. This is a bitter pill to swallow and most will prefer to, as they have been conditioned to do, continue on their path of media-induced delusion, denial, apathy and ignorance.

However, I still cling to the hope that once enough people become aware of this hidden and obscured fact, we can have the non-violent revolution we so urgently need. Until then, the rich get richer as a critical mass with increasingly dire economic prospects desperately struggles to make ends meet.

Part Four :: Fascism in America

Other than driving large segments of the American population into poverty, and pushing the majority into massive debt and a state of financial desperation, there is an ever darker side to what is unfolding today. The Economic Elite have turned America into a modern day fascist state.

Fascism is a very powerful word which evokes many strong feelings. People may think that the term cannot be applied to modern day America. However, as Benito Mussolini once summed it up: “Fascism should more properly be called corporatism, since it is the merger of state and corporate power.” In the early 1900s, the Italians who invented the term fascism also described it as “estato corporativo,” meaning: the corporate state.

Very few Americans would argue the fact that corporations now control our government and have the dominant role in our society. Through a system of legalized bribery – campaign finance, lobbying and the revolving door between Washington and corporations – the most power global corporations dominant the legislative and political process like never before. Senator Huey Long had it right when he warned: “When fascism comes to America, it will come in the form of democracy.”

As President Franklin D. Roosevelt once described fascism: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes strong than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or any controlling private power.”

The most blatant modern example of this was the bailout of Wall Street, when the “too big to fail” banks got politicians to promptly hand out trillions of tax dollars in support and subsidies to the very people who caused the crisis, without any of them being held accountable.

XI :: Modern Day Slavery

Another shocking example of how far we have descended into fascism is the American Legislative Exchange Council (ALEC), which is a group of corporate executives who literally write government legislation. They have gone as far as setting up a system that imprisons the poor and then puts them to work, instead of paying living wages to non-imprisoned workers. Make no mistake, this is a modern day system of slavery unfolding before our eyes.

At the leadership of ALEC and various other Economic Elite organizations, poverty has essentially become a crime. To demonstrate these attacks against the poor, there was $17 billion cut from public housing programs, while there was an increase of $19 billion in programs for building prisons, “effectively making the construction of prisons the nation’s main housing program for the poor [71].” Before laws began to be rewritten in 1980, with direct input from ALEC [72], we had a prison population of 500,000 citizens. After laws were rewritten to target poor inner city citizens with much more severe penalties, the US prison population skyrocketed to 2.4 million people.

We now have the largest prison population in the world. With only 4% of the world’s population, we have 25% of the world’s prison population. As I reported previously, in a report entitled, “American Gulag: World’s Largest Prison Complex [71]“:

“The US, by far, has more of its citizens in prison than any other nation on earth. China, with a billion citizens, doesn’t imprison as many people as the US, with only 308 million American citizens. The US per capita statistics are 700 per 100,000 citizens. In comparison, China has 110 per 100,000. In the Middle East, the repressive regime in Saudi Arabia imprisons 45 per 100,000. US per capita levels are equivalent to the darkest days of the Soviet Gulag.”

XII :: The Death Toll

The dramatic increase in poverty has obviously torn many families apart and caused a devastating psychological toll, but consider the increase in deaths as a result of poverty and severe wealth inequalities. This is a very difficult statistic to accurately measure, but Columbia University’s School of Public Health [73] conducted an intensive examination of mortality and medical data and estimated that “875,000 deaths in the US in 2000 could be attributed to a cluster of social factors bound up with poverty and income inequality.”

As a report by Debra Watson sums up [73] the study, “There is no reason to believe, after a decade that has seen sustained attacks on social programs and consistently high unemployment rates, that the social mortality rate has declined. On the contrary, it has likely risen.” Indeed, poverty and income inequality have skyrocketed since 2000.

Now, let’s consider the fact that, according to the Census Bureau, 31.1 million [74] people lived in poverty in 2000, and according to Columbia’s study 875,000 deaths came as a result. This means that 1 out of every 35.5 people living in poverty die annually as a result of their impoverishment. If you extrapolate this data to the 2009 total of 52.8 million people living in poverty, you get an estimate of 1,486,338 deaths within that year. Even if you use the lower poverty totals from the Census Bureau, 43.6 million people, you get an estimate of 1,228,169 deaths in 2009.

XIII :: Deliberate Systemic Attacks

The dramatic increase in economic inequality and poverty, along with the unprecedented rise in wealth within the top one-tenth of one percent of the population has not happened by mistake. It is the designed result of deliberate governmental and economic policy. It is the result of the richest people in the world, and the “too big to fail” banks, using the campaign finance and lobbying system to buy off politicians who implement policies designed to exploit 99.9% of the population for their financial gain. To call what is happening a “financial terrorist attack” on the United States, is not using hyperbole, it is the technical term for what is currently occurring.

Compare the million people who die annually as a result of these economic attacks, to the 2,977 that died on 9/11. As someone who lived three blocks from the World Trade Center, as tragic as 9/11 was, these economic attacks are much more severe and damaging to us as a nation, albeit a much slower and unseen death toll. Nonetheless, the result is of genocidal proportions. One can statistically compare the economic attacks on the US to the invasion of Iraq, which some estimate as leading to one million deaths. Once again, many of those deaths came in brutal and spectacular fashion in bombing campaigns known as “shock and awe.” However, the death toll compares to the hidden brutality of a four-year campaign of economic “shock and awe.” Just as Iraq was invaded, the US has been invaded by a global banking cartel.

As shocking as that is to realize, consider that this is happening throughout the world. While the US poverty death rate is probably higher than in most European countries, the Federal Reserve’s economic policies [75] — along with policies from the International Monetary Fund, World Bank and Bank of International Settlements — have caused rioting and uprisings over skyrocketing food prices and costs of living throughout the world. The fact of the matter, and very harsh and unfortunate reality of this crisis, is that the global economic central planners are deliberately carrying out genocidal economic policies.

As Che Guevara, a man who took on the global financial elite, once said, “The amount of poverty and suffering required for the emergence of a Rockefeller, and the amount of depravity that the accumulation of a fortune of such magnitude entails, are left out of the picture, and it is not always possible to make the people in general see this.”

When tens of trillions of dollars deliberately flow to the top economic one-tenth of one percent of the global population, while large percentages live in poverty, you have to conclude, in technical terms, that a Neo-Feudal-Fascist state is upon us. The rich have never been richer, while their paid off politicians make budget cuts for the poor and middle class, and cause the cost of basic necessities to skyrocket.

You can call me extreme, but the reality of this is extreme, these people, the global economic top one-tenth of one percent, are genocidal fascists carrying out a holocaust. Fascism has evolved. There is no need to get blood on your hands while rounding up people and putting them into concentration camps when you can do it through economic policy while sitting in a jacuzzi on a corporate jet, or in a three-piece custom-made Armani, completely detached and insulated from the world in which you plunder.

However, as what happens with all empires, greed and arrogance makes them overreach. The beaten down masses get to a point where they literally can’t live under these conditions. This desperation spreads throughout the population until it reaches a critical mass, then, suddenly, they rise up [75] and the empire begins to collapse… Tunisia, Algeria, Egypt, Israel, (Northern Africa, the Middle East), Albania, Greece, Spain, Britain (Europe), Wisconsin…

The Economic Elite are overreaching and their empire is collapsing.

The decentralized global rebellion [75] has begun…

Welcome to World War III.

Which side of history do you want to be on?

As a wise old friend once said [76], “You can’t be neutral on a moving train.”

David DeGraw is the founder and editor of AmpedStatus.com [77]. His long-awaited book, The Road Through 2012: Revolution or World War III [78], will finally be released on September 28th. He can be emailed at David[@]AmpedStatus.com. You can follow David’s reporting daily on his new personal website: DavidDeGraw.org [79]

NOTES

[1] : http://twitter.com/home/?status=EXCLUSIVE%3A+Analysis+of+Financi…

[3] Abstract :: Welcome to World War III: #abstract

[4] Introduction: #intro

[5] I :: Poverty: #poverty

[6] II :: Food Insecurity: #food

[7] III :: Unemployment: #unemployment

[8] IV :: Declining Income: #income

[9] V :: How Much Wealth Do The Economic Elite Have?: #elite

[10] VI :: Who Rules America? Revealing The Economic Top 0.1%: #rules

[11] VII :: Tax Breaks For The Rich, Budget Cuts For The Rest Of Us: #tax

[12] VIII :: Debt Slavery: #debt

[13] IX :: Inflation: #inflation

[14] X :: The Beaten Masses: #passive

[15] XI :: Modern Day Slavery: #slavery

[16] XII :: The Death Toll: #death

[17] XIII :: Deliberate Systemic Attacks: #attacks

[18] The Economic Elite Vs. The People: http://ampedstatus.org/full-report-the-economic-elite-vs-the-people-of-the-united-states-of-america/

[19] declined by 28%: http://pewsocialtrends.org/files/2011/07/SDT-Wealth-Report_7-26-11_FINAL.pdf

[20] my analysis: http://ampedstatus.org/census-bureau-poverty-rate-drastically-undercounts-severity-of-poverty-in-america/

[21] 52,765,000: http://www.census.gov/hhes/povmeas/data/nas/tables/2009/web_tab4_nas_measures_historical.xls

[22] 15.5 million: http://www.childrensdefense.org/child-research-data-publications/data/state-of-americas-2011.pdf

[23] poverty rate would double: http://www.offthechartsblog.org/public-programs-keep-millions-out-of-poverty-new-study-shows/

[24] in half: http://motherjones.com/politics/2011/08/united-states-of-austerity

[25] 25.7 million: http://www.cbpp.org/cms/index.cfm?fa=view&id=460

[26] 45.8 million people: http://www.fns.usda.gov/pd/29SNAPcurrPP.htm

[27] cutting the funding: http://blogs.abcnews.com/thenote/2011/05/congress-mulls-cuts-to-food-stamps-program-amid-record-number-of-recipients.html

[28] additional 22.5 million: http://www.arcamax.com/health/healthtips/s-917916-690577

[29] ShadowStats.com: http://ShadowStats.com

[30] 6.3 million: http://news.yahoo.com/blogs/lookout/down-not-voices-long-term-unemployed-125453267.html

[31] 40.4 weeks: http://www.zerohedge.com…

[32] 16-month high: http://www.challengergray.com/press/PressRelease.aspx?PressUid=184

[33] 10.6 million: http://www.zerohedge.com…

[34] 577,000: http://www.thenation.com/blog/162577/after-debt-ceiling-debacle

[35] 60%: http://www.zerohedge.com/article/how-fed-spent-2-trillion-and-exchange-we-got-650000-temp-leisure-and-retail-jobs

[36] 12 months: http://www.huffingtonpost.com/2011/02/23/us-economy-trades-high-pa_n_827360.html

[37] $8,588: http://www.reuters.com/article/2011/08/04/us-usa-economy-incomes-idUSTRE77302W20110804

[38] quadrupled: http://www.washingtonpost.com/business/economy/with-executive-pay-rich-pull-away-from-rest-of-america/2011/06/13/AGKG9jaH_print.html

[39] summed up: http://www.tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8AGMUZ?OpenDocument

[40] 28%: http://www.huffingtonpost.com/2011/06/15/executive-pay-soars-worker-pay-stagnates_n_877519.html

[41] report: http://dollarsandsense.org/archives/2011/0711cypher.html

[42] 88% of income growth: http://thinkprogress.org/economy/2011/06/30/258388/corporate-profits-recovery/

[43] recently reported: http://www.zerohedge.com/article/attention-marxists-labors-share-national-income-drops-lowest-history

[44] $38.6 trillion: http://www.zerohedge.com/…

[45] $6.3 trillion: http://www.democracynow.org/2011/4/15/offshore_banking_and_tax_havens_have

[46] $1,000,000,000,000: http://www.pagetutor.com/trillion/index.html

[47] richest 400 people: http://ourfuture.org/blog-entry/2011020612/understanding-extreme-incomewealth-gap

[48] 40% of all wealth: http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105?currentPage=all

[49] more wealth than 90%: http://www.youtube.com/watch?v=IykY6WlUIiA

[50] an analysis: http://ampedstatus.org/…

[51] Who Rules America?: http://www.amazon.com/exec/obidos/ASIN/0078111560

[52] $27 million: http://washingtonindependent.com/107493/americas-super-rich-continue-to-make-mind-boggling-sums

[53] $145 billion: http://nymag.com/daily/intel/2010/01/wall_street_pay_for_2009_will.html

[54] $149 billion: http://www.aflcio.org/corporatewatch/paywatch/ceopay.cfm

[55] reported: http://articles.latimes.com/2010/aug/11/business/la-fi-insurance-salaries-20100811

[56] $72 million: http://blogs.courant.com/connecticut_insurance/2011/04/aetnas-former-ceo-ronald-willi.html

[57] war profiteering: http://daviddegraw.org/2011/08/leaked-document-bp-rules-iraq-with-stranglehold-over-economy-by-controlling-largest-oil-field/

[58] $36 billion: http://daviddegraw.org/2011/08/the-joke-is-on-us-once-again-big-five-oil-companies-reaped-36-billion-in-profit-last-quarter/

[59] only 18%: http://blogs.forbes.com/robertlenzner/2011/07/25/the-400-richest-americans-pay-an-18-tax-rate/?partner=yahoofeed

[60] 1,470 Americans: http://www.huffingtonpost.com/2011/08/04/irs-incomes_n_918458.html

[61] $136,000: http://www.commondreams.org/view/2011/08/05-5

[62] 8.9%: http://www.ritholtz.com/blog/2011/04/corporate-tax-rates-then-and-now/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+(The+Big+Picture)

[63] $16 trillion: http://www.usdebtclock.org/

[64] $1 trillion: http://www.huffingtonpost.com/2011/04/12/student-loan-debt-may-top_n_848093.html

[65] 11.1%: http://georgewashington2.blogspot.com/2011/07/official-cpi-is-running-36-but-if-it.html

[66] 3.6%: http://www.bls.gov/news.release/cpi.nr0.htm

[67] increased 39%: http://www.fao.org/news/story/en/item/81577/icode/

[68] increased 34%: http://docs.google.com/viewer?…

[69] lost 7.5%: http://www.zerohedge.com/article/gold-just-1-record-nominal-high-1444oz-risk-dollar-crisis-increases-day

[70] 10.8 million: http://daviddegraw.org/2011/07…

[71] housing program for the poor: http://ampedstatus.org…

[72] direct input from ALEC: http://www.justicepolicy.org/uploads/justicepolicy/documents/gaming_the_system.pdf

[73] Columbia University’s School of Public Health: http://www.wsws.org/articles/2011/jul2011/pove-j13.shtml

[74] 31.1 million: http://www.census.gov/prod/2001pubs/p60-214.pdf

[75] Federal Reserve’s economic policies: http://ampedstatus.org…

[76] once said: http://www.youtube.com/watch?v=Ehc3V1g5pm0

[77] AmpedStatus.com: http://AmpedStatus.com

[78] The Road Through 2012: Revolution or World War III: …

[79] DavidDeGraw.org: http://daviddegraw.org/

[80] donate to support our efforts here: http://ampedstatus.com/donation.php

Manipulated Markets Make a Come Back

Does it make sense that during the deepest depression since 1929, the U.S. Stock Market comes back up from a 6oo+ point decline? Only a manipulated system where speculators have complete control could recover from a rout that showed how little confidence investors have in the market today.

by Luis R. Miranda
The Real Agenda
August 9, 2011

While countries are in dire straits to make payments on mostly illegally acquired debts and the price of oil continues to fall; while little to nothing is produced or manufactured in the industrialized world and no ingenuity makes it big anywhere in the world; while the most important currencies continue to tumble and other financial markets turn more sour; while unemployment continues to grow from the low 20’s and more people make use of food stamps and unemployment benefits; while more jobs are exported to third world nations that support slave work for their populations and inflation is only tamed by artificial manipulation of the currencies; while numerous people look to gold and silver as their salvation, surprisingly the stock market came back from the pantheon and surged to recover from the slide seen just a few hours ago.

There is very little that can't be done when someone or something controls fiat currencies, rating agencies, and financial markets.

But not only did the stocks came back strong; they had the largest gains in more than two years. Along with this “come back” the U.S. dollar got weaker and the Swiss franc rose the most since 1971. Even the very same Standard & Poor Index managed to recover almost 5 percent, the most significant gains since 2009. In the meantime, the origin of the financial disaster, the privately owned banks headed by the Federal Reserve announced their intent to print more worthless money into the economy as a way to “boost” confidence. Even though QE1 and QE2 failed to provide any confidence, or for that matter failed to provide anything positive, the FED believes it is appropriate to bring up QE3. With this, the FED shows its interest to purchase more government bonds, which will consolidate its position as the largest holder of U.S. government debt.

“The Fed is clearly setting up a situation that could offer them the potential to do something significant, if necessary,” Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview. “That could be viewed as a positive,” added McCain. “People are starting to realize that what we’ve had in the market was an overreaction.” Really? Positive? How so?

Artificial Surge after the Decline

How can a stock market come back from a 600+ point decline in just a few hours if one considers that the cause of such loss -the downgrade of the U.S. debt rating- has not been dealt with? It simply boggles the mind, doesn’t it? The United States credit rating was lowered from AAA to AA+ by Standard & Poors, a rating agency that is paid by the banks to evaluate financial products and which is in part responsible for the current financial catastrophe. Together with Moody’s, S&P was created the by the banking system to carry out “independent” evaluations of financial products as well as credit confidence on institutions, state and local governments and of course whole nations.

According to Bloomberg, Stocks came back from a loss of $ 1 trillion after S&P downgraded the U.S. credit rating last Friday evening. The results of the downgrade were not felt until Monday, when the Markets opened all over the world. The S&P index sank about 11 percent and the stock market lost 648 points or more than 6 percent. But just 24 hours later, everything was different. “The MSCI All-Country World Index rose 2.1 percent for its biggest gain of the year”, says Bloomberg. “The index started the U.S. session valued at about 12.1 times profits, down from 21 in 1995..The MSCI Emerging Markets Index pared today’s drop to 2.2 percent after tumbling as much as 4.4 percent.”

Stocks Rally? What Rally?

In the Stock Market, the Dow Jones climbed almost 430 or 4 percent, failing to completely recover from the recent loss. The stocks experienced the 1oth more significant gain in its history. Can you believe it? In the middle of a Depression, the stocks rally the much?

Meanwhile, in the S&P, shares got to the front of the line due to the numerically significant gains. In total, they accumulated some 8.2 percent all together. This is the biggest rally since May 2009, which meant a complete recovery from Monday’s low. Bank of America Corp., which is now being sued by AIG for fraud, managed to gain 17 percent while other players like Hartford Financial Services got back 16 percent.

Of course the main stream media is giving all credit to the Federal Reserve, due to its announcement that it intends to “boost” the economy by injecting worthless cash into it. The FED’s head, Ben Bernanke and his aides came out to try to calm the demise a bit, although not everyone at the FED agreed with the move to bring along a new quantitative easing move. Three members from the policy committee dissented and instead called for maintaining interest rates low for a longer period of time.

As the docu-film “The Inside Job” impeccably exposes, there is very little that can’t be done when someone or something has the power to create money out of thin air, create rating agencies, control those agencies to give AAA ratings to whatever they choose and electronically manipulate the financial stock and bond markets whenever it’s convenient in order to perpetuate the fraudulent debt-based system the world has worked under since 1913.

False Policy Changes

The best way to perpetuate the above cited financial system is to have the available tool continuously reinforce the falsehood of the Central Bank sponsored plans. So, Moody’s has come out to praise the FED’s move to maintain the interest rates at a quarter of a percent in order to bolster the downturn. It’s a  “major policy change,” said Augustine Faucher, director of macroeconomics at Moody’s. “By providing a more explicit time line for raising rates, the Fed is telling markets it is concerned about recent economic weakness and the potential for a near-term contraction, and is dedicated to spurring stronger economic growth,” Faucher added.

Just as this statement by Faucher is baseless, so is the belief that because the U.S. dollar is the world’s reserve currency, it can stand more beating than any other one. In fact, one of the reasons why the U.S. has not been downgraded further is that its currency is still consider valuable. Ironically, the dollar has lost 98 percent of its value since it became the subject of manipulation by the bankers. Moody’s has stated that the U.S. dollar can support larger levels of debt than other currencies. How do they figure that with a currency that is so devalued. They can’t figure it out. They just make it up.

The one world reserve currency scheme is only beneficial to those who control it, because the rest of the nations need to do business while devaluing their own. In sound economics, the value of paper money is based on a country’s production or manufacturing, therefore, the U.S. dollar can no longer be such reserve currency. U.S. manufacturing has eroded so badly, that it has cost the jobs of some 18 million people in the last few years.

If the U.S. dollar is still the world’s reserve currency, why are there other currencies that have better exchange rates than the dollar itself? I am no economic expert, but if the Swiss Frank rates higher than the dollar in currency exchange markets, shouldn’t the Frank be the reserve currency? Or even better, shouldn’t a commodity like gold be the reserve currency given its capacity to withstand recessions, depressions and financial market manipulations? It should. The reason why gold is not the reserve currency or at least the commodity over which a paper money currency is supported is that bankers cannot monopolize it, “hug” it or manipulate it.

High Market but Low Results: The World Economy in Shambles

While the banks try to extend the suffering period for the middle and low classes, countries in Europe are scrambling for a life boat to jump on. Although France and Germany are said to be negotiating an agreement to buy Spain’s and Italy’s debt in order to avoid a deeper economic collapse, some sources claim that the rescuers believe the Italian debt is too large to save. Both Nicolas Sarkozy and Angela Merkel began to hear opposition voices that are calling for a different position from the German and French governments. The reason for this is that an eventual bailout of Italy and Spain could cost the rescuers their AAA rating. This is seen as a possible trigger to drag the world’s economy further into the precipice.

Although U.S. markets artificially revived themselves on Tuesday, other countries were not as lucky. In Italy, the bond market saw a loss of 11 percent on its 10 year note. Just as the FED has done in the United States, the European Central Bank kept Italy and Spain afloat through the purchase of their bonds for a second day in a row. That was not enough to save the Spanish 10 year notes, as they collapsed eight basis points to 5.08 percent on Tuesday.

Meanwhile, oil prices hit some of the lowest levels for the year by getting down to $79.30 a barrel. Conversely, gold prices soared and added 4.1 percent to get to a record price of $1,782.50 an ounce.

A Tottering Technocracy

Here and in Europe, the financial meltdown exposes the hollowness of our elites.

by Victor Davis Hanson
National Review
August 9, 2011

We are witnessing a widespread crisis of faith in our progressive guardians of the last 30 years. These are the blue-chip, university-certified elite, employed by universities, government, and big-money private foundations and financial-services companies. The best recent examples are sorts like Barack Obama, Eric Holder, Larry Summers, Peter Orszag, Robert Rubin, Steven Chu, and Timothy Geithner. Politicians like John Kerry, John Edwards, and Al Gore all share certain common characteristics of this Western technocracy: proper legal or academic credentials, ample service in elected or appointed government office, unabashed progressive politics, and a free pass to enjoy ample personal wealth without any perceived contradiction with their loud share-the-wealth egalitarian politics.

The house of a John Kerry, the plane of an Al Gore, or, in the European case, the suits of a Dominique Strauss-Kahn are no different from those of the CEOs and entrepreneurs who were as privately courted as they were publicly chastised. These elites were mostly immune from charges of hypocrisy or character flaws, by virtue of their background and their well-meaning liberalism.

The financial meltdown here and in Europe revealed symptoms of the technocracy’s waning. On this side of the Atlantic, Geithner, Orszag, Summers, Austan Goolsbee, Paul Krugman, and Christina Romer apparently assumed that some academic cachet, an award bestowed by like kind, or a long-ago-granted degree should give them credibility to advocate what the tire-store owner, family dentist, or apple farmer knew from hard experience simply could not be done — borrow or print money on the theory that insular experts, without much experience in the world beyond the academy or the New York–Washington financial and government corridor, could best direct it to productive purposes.

But now they have either left government or are no longer much listened to — and some less-well-certified accountant will be left with the task of finding ways to pay back $16 trillion. Abroad, at some point, German clerks and mechanics are going to have to work a year or two past retirement age to pay for those in Greece or Italy who chose to stop working a decade before retirement age — despite all the sophisticated technocratic babble that such arithmetic is reductive and simplistic.

In the devolution from global warming to climate change to climate chaos — and who knows what comes next? — a small group of self-assured professors, politicians, and well-compensated lobbyists hawked unproven theories as fact — as if they were clerics from the Dark Ages who felt their robes exempted them from needing to read or think about their religious texts. Finally, even Ivy League and Oxbridge degrees and peer-reviewed journal articles could not mask the cooked research, the fraudulent grants, and the Elmer Gantry–like proselytizing about everything from tree rings and polar-bear populations to glaciers and the Sierra snowpack. A minor though iconic figure was the truther and community activist Van Jones, the president’s “green czar,” who lacked a record of academic excellence, scientific expertise, or sober and judicious study, assuming instead that a prestigious diploma and government title, a certain edgy and glib disdain for the masses, and media acclaim could permit him to gain lucre and influence by promoting as fact the still unproven.

Higher education is no longer affordable for many families, and does not guarantee well-rounded, well-educated graduates. A university debt bubble, in Fannie and Freddie fashion — together with the rise of no-frills private online certificate-granting institutions — is undermining traditional higher education. The symptoms are unmistakable: tuition spiraling far ahead of inflation; elite faculty excused from teaching to publish esoteric articles in little-read journals; legions of poorly compensated part-time instructors and graduate-student assistants subsidizing the privileged class; political orthodoxy as an unspoken requisite for membership in the club. An administrator is deemed successful largely for promoting “diversity” — rarely on the basis of whether costs stabilized, graduation rates increased, the need for remediation declined, or post-graduation jobs were assured on his watch. This warped system, which grew out of the bountiful 1960s, is now a vestigial organ, an odd-looking thing without an easily definable purpose. When will the bubble burst? If the four-year university cannot ensure its graduates that they will necessarily have a better-paying job and know more than the products of an upfront credentialing factory, why incur the $200,000 cost and put up with the political indoctrination?

Kindred media elites in Europe and the United States lauded supposed technocratic expertise without much calibration of achievement. Indeed, to examine the elite media is to unravel the incestuous nature of power marriages and past loyal service to heads of state. Those who praised Obama as a god or attributed their own nervous tics to his omnipresence or reported on his brilliant policies often either had been speechwriters to past liberal presidents, enjoyed family connections, or were married to other New York or Washington journalists or powerbrokers. Their preferences about where to send a kid to school, where to vacation, and what to think were as similar to those they reported on as they were foreign to those who were supposed to listen to them. Like wealthy people in the Middle Ages who bought indulgences instead of truly repenting their sins, the more our elites preached about egalitarian politics for the fly-over upper middle classes, the less badly they felt about their own mannered conniving for privilege and status.

A generation ago, we were supposed to be grateful that a few gifted and disinterested minds were digesting our news for us each day on cash-rich ABC, CBS, NBC, NPR, and PBS, and in the New York Times, Washington Post, and Los Angeles Times, summarized periodically on weekend network discussion groups and in newsweeklies like Time and Newsweek. Now the market share of all these enterprises is shrinking. Some exist only because of government subsidy, rich parent companies, or like-minded wealthy benefactors.

The technocratic pronouncements from on high — that Barack Obama was “sort of GOD,” or at least “the smartest president in history”; that a Harvard-trained public-policy wonk alone knew how to save us from a roasting planet — are now seen by most as laughable. An education-age Reformation is brewing every bit as earth-shattering as its 16th-century religious counterpart.

There are also generic signs of the technocracy’s morbidity. It deeply distrusts democracy, most recently evidenced by John Kerry’s rant that the media should not even cover the Tea Party, and by the European Union’s terror of allowing the public to vote on its intricate financial bandaging. It is no accident that technocratic journalists love autocratic China — with its ability to promote mass transit or solar panels at the veritable barrel of a gun — while hating the Tea Party, which came to legislative power through the ballot box.

So the elites’ furor grows at those who seek and obtain power, exposure, and influence without the proper background, credentials, or attitude. How else to explain why a Michele Bachmann or Sarah Palin earns outright hatred, whereas a Mitt Romney or John McCain received only partisan disdain?

There is an embarrassing lack of talent and imagination in the last generation of the technocrats. One banal memo about a “tea-party downgrade” or a “jihadist” takeover of the Republican party is mimicked by dozens of politicians and journalists who cannot think of any more creative phraseology. Calls for civility are the natural accompaniment to unimaginative slurring of those outside the accustomed circle. When Steven Chu exhorts us that gas prices should match European levels or assures us that California farms will blow away, should we laugh or cry? Do learned attorneys general call the nation “cowards,” refer to fellow minority members as “my people,” or really believe that they can try the self-confessed terrorist architect of 9/11 in a civilian court a few yards from the scene of his mass murder? Was Timothy Geithner really indispensable in 2009 because other technocrats swore he was?

We are living in one of the most unstable — and exciting — periods in recent memory, as much of the received wisdom of the last 30 years is being turned upside down. In large part the present reset age arises because our political and cultural leaders exercised influence that by any rational standard they had never earned.